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Harm to Older Americans From Taking Away Medicaid for Not Meeting Work Requirements

More than 8.5 million Americans age 50-64 get health coverage through Medicaid. Many of them became eligible due to the Affordable Care Act’s (ACA) expansion of Medicaid to more low-income adults, which helped drive a nearly 40 percent decline in uninsured rates for lower-income people age 50-64 between 2013 and 2016.

But Medicaid coverage for many low-income, older Americans is at risk due to the Trump Administration’s decision to let states take away coverage from enrollees who do not work or engage in qualifying work activities (such as job training) for a sufficient number of hours each month. The Administration has already approved work requirements in several states and is allowing states to impose work requirements on adult enrollees other than those who are 65 or older, pregnant, or qualify for Medicaid because they are receiving federal disability benefits.

Older adults face particular challenges in meeting such requirements, and the health consequences if they lose Medicaid coverage are likely to be especially severe.

Older Adults Face Obstacles to Meeting Work Requirements

Across age groups, about 60 percent of non-elderly adult Medicaid enrollees not receiving Supplemental Security Income (SSI) work; of the rest, about half live in working families, and more than 80 percent report that they are in school or unable to work due to illness, disability, or caregiving responsibilities. But employment rates are lower at older ages. Whereas nearly two-thirds of enrollees under age 50 work, work rates begin to fall off for those over 50, and only a minority of 60- to 64-year-olds work. (See first chart.) In addition, some working enrollees (of all ages) work part time, meaning they may not meet monthly hours requirements under work requirement policies.

There are many reasons older enrollees are more likely to be out of work. Some, especially those in their 60s, are retired. About 68 percent of all current retirees retired before age 65, and nearly half of Social Security retirees claim benefits before age 65. Hundreds of thousands of Social Security retirees age 62 to 64 depend on Medicaid for coverage. To qualify for Social Security benefits, this group must have worked much or all of their adult lives, but if Social Security is their only or primary source of income, they likely qualify for Medicaid: the average Social Security benefit for someone who retires at age 62 puts them just slightly above the poverty line for a single adult.

People in their 50s and 60s are also much more likely than younger people to have serious, chronic health conditions, including heart disease, diabetes, or back pain; these conditions are even more common among lower-income older people (see second chart). Such conditions generally do not qualify people for federal disability assistance, and people with these conditions may be able to work when their conditions are controlled through treatment, when they are not at their most severe, or if they can find jobs that allow them to work part time or accommodate their physical limitations. But such conditions often still make it hard for people to maintain steady, full-time employment, putting them at risk of non-compliance with work requirements and therefore lost or interrupted coverage.

For example, Ronnie Maurice Stewart, one of the plaintiffs in a recently filed lawsuit against Kentucky’s waiver, worked for years in mental health clinics and then as a medical assistant, but he retired once eligible to claim Social Security benefits (worth $841 per month) because he could no longer do a job that required him to be on his feet all day. Stewart, who is 62, has diabetes, arthritis, and high blood pressure and “is concerned that he will lose his health coverage if he is unable to work because of his health or if he takes a job with varying work hours,” the suit explains.

Exemptions Won’t Keep Older People From Losing Coverage

Kentucky’s approved work requirements policy, and most other states’ pending proposals, apply to people up to age 64, with no exceptions for early retirees. The Administration’s work requirements guidance does instruct states that enrollees who are in compliance with or exempt from separate Supplemental Nutrition Assistance Program (SNAP) work requirements should be treated as complying with Medicaid requirements. That approach may protect many older adults, since SNAP generally requires people 50 and over to register as looking for work but does not terminate their benefits if they cannot find a job. But millions of older Medicaid enrollees are not enrolled in SNAP and thus could still be at risk of losing coverage in states that implement Medicaid work requirements.

State waivers generally propose limited exemptions for people who are “medically frail” and for those “diagnosed with an acute medical condition” that prevents compliance. But, as AARP and other advocacy groups for older people and people with disabilities explained in a recent brief, these exemptions won’t keep older enrollees with serious health conditions from falling through the cracks.

First, the exemptions are narrow, and many people won’t qualify as medically frail. Arkansas, for example, estimates that just 10 percent of expansion enrollees are medically frail. By comparison, almost a quarter of adult Medicaid enrollees not receiving SSI have a disability.

Second, even people who should qualify for exemptions may struggle to prove that they do. Obtaining physician testimony, medical records, or other required documents may be difficult, especially if beneficiaries don’t have health coverage while seeking to prove they are exempt. Red tape and paperwork requirements have been shown to reduce enrollment in Medicaid across the board, and people coping with serious mental illness or physical impairments may face particular difficulties meeting these requirements. The experience of work requirements for other programs shows that people with disabilities are disproportionately likely to be sanctioned, even though many should be exempt.

And by worsening access to health care, Medicaid work requirements may actually make it harder for older people who are trying to keep working to do so. A long-term randomized trial found that providing regular care to people with heart disease increased their earnings, likely by reducing their time out of work due to illness. Conversely, making health care contingent on work is likely to result in a vicious cycle where someone who loses their job because their heart disease or diabetes worsens also loses access to treatment, making it impossible for them to regain their health and employment.